London: US annual inflation reduced to 5 per cent last month, official figures revealed, the slowest pace for price increases since 2021 they first began to climb, according to a media report.
March’s monthly consumer price index (CPI), which measures the price of a basket of goods and services, showed the rate easing off over the last year, The Guardian reported.
In February, the annual inflation figures stood at 6 per cent, already a steep decline from its peak of 9.1 per cent in June, the report said.
But core inflation, which does not include volatile energy and food prices, has remained steady – a sign that the slowing pace could be attributed to comparisons against soaring gas prices a year ago, near the beginning of Russia’s invasion of Ukraine. March’s core inflation rate over the last year was 5.6 per cent, compared to February’s 5.5 per cent.
Despite the overall cooling, the closely-watched inflation report will probably not sway officials at the Federal Reserve, who have been eyeing further interest rate hikes in their aggressive campaign to lower inflation, The Guardian reported.
Even as the overall inflation rate is on a downward trend, economists are expecting the Fed to continue raising interest rates, despite the volatility increased rates could bring to the economy, The Guardian reported.
In March, the Fed increased rates by a quarter point to a range of 4.75 per cent to 5 per cent, a move largely seen as both assertive and conciliatory in the direct aftermath of the collapse of Silicon Valley Bank (SVB). The Fed has increased interest rates nine consecutive times over the last year, raising rates by a quarter point up to three-quarter points at a time.
In March, the Fed chair, Jerome Powell, said that the central bank was closely monitoring the impact of SVB’s collapse but was still adamant on getting inflation down to a target goal of 2 per cent.
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